Companies Pay Workers to Lose Weight

Tina Lopez, an administrative assistant at IBM, lost 16 pounds when she joined her company's Wellness Program and gained $1,800 in return.

Lopez joined the program when it first started six years ago.

"It made me look at what I was eating daily and notice that I had to adjust the way I was eating and living to make myself healthier," Lopez says.

A Healthy Business

IMB pays its employees up to $300 for joining programs that teach them healthy eating, physical activity, family wellness and how to stop smoking.

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Half of IMB's domestic workers have signed up and the company says it saves about $65 million a year in health care costs.

"We decided that it was healthy for our business if we had healthy employees. It was that simple," says Randy MacDonald, IBM's senior vice president of human resources.

$500 for Walking

A growing number of companies are adopting this new business strategy. Some companies now pay employees to exercise and others even pay their workers for simply enrolling in health care surveys.

Last year, a hospital in Ohio began offering its workers up to $500 for walking. Half of its employees signed up and the hospital had to pay out nearly $400,000.

Does it Pay to Pay

Monetary incentives seem to help companies get employees to eat better and exercise more, but paying workers to lose weight might not be as effective.

Cornell University professor John Cawley studied 2,400 employees enrolled in seven corporate programs that paid them for each pound they shed.

The study found that those who were paid to lose weight lost less than those employees who were not getting paid.

"At the end of a year, those people [who were paid] lost an average of 1.4 pounds, which was actually less than average of 1.7 pounds in the control group, which received no financial incentive," Cawley said.

Still, employer health care costs are soaring and many companies are discovering that it pays to pay employees to live healthier lives.